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Better Than Cash Alliance Can Boost Afghanistan’s Economy
January 24, 2013

January 26,  2013

Afghanistan’s decision to join the Better Than Cash Alliance will help address poverty and promote economic growth, the U.S. Agency for International Development (USAID) says.

USAID is a founding partner of the alliance, along with the Bill & Melinda Gates Foundation, Citi, the Ford Foundation, Omidyar Network, U.N. Capital Development Fund and Visa Inc. The alliance seeks to empower people by transitioning from cash to electronic payments.

The shift to electronic payments in programs that currently distribute cash or in-kind goods to people living in poverty can result in significant cost savings, transparency, security and economic growth, USAID said in a January 22 press release. For example, a recent report by the World Bank found that governments can save up to 75 percent of costs by shifting to electronic payment programs.

Today, 2.5 billion adults — more than a third of the world’s population — are excluded from the formal financial sector, according to USAID. This is most acute in the developing world, where approximately 80 percent of poor people are excluded. As a result, most poor households have no option but to subsist almost entirely in an informal, cash-only economy, making it extraordinarily difficult for them to access financial services such as bank accounts, to save for the future, build assets or get credit.

Electronic payments can create lasting benefits for people by creating opportunities to access formal financial services and begin to develop assets and save for the future, USAID said.


There are many needs and opportunities to transition from cash to electronic payments in Afghanistan, USAID said. Currently, there are nearly 1 million Afghan government employees unable to receive their salaries electronically. Fewer than 5 percent of Afghans have bank accounts.

Afghanistan’s Ministry of Finance currently is partnering with the Ministry of Education and the Association of Mobile Money Operators on an innovative teacher salary payment pilot that aims to increase the number of bank accounts and electronic salary payments.

The Afghan government is also conducting a mobile/electronic utility payment pilot in Kabul targeting 100,000 electricity customers. Nearly 60 percent of all Afghans have mobile phones and more than 83 percent of the population live in areas with mobile network coverage.

“We are pleased to join the Better Than Cash Alliance as a committing member dedicated to making the transition from cash to electronic payments,” said Director-General of Treasury Mohammed Aqah of Afghanistan’s Ministry of Finance. “We recognize the value of accelerating the use of safe electronic payments as a solution for promoting financial inclusion, increasing transparency, and creating a more secure world for women and their families.”

Afghanistan joins the governments of Colombia, Kenya, Peru and the Philippines, along with development organizations USAID, the United Nations Development Programme, the World Food Programme, Mercy Corps, CARE USA, Chemonics International and Concern Worldwide, which have committed to digitize their disbursements and payments to people living in poverty, thereby becoming eligible members for technical and financial support from the Better Than Cash Alliance.

“We commend Afghanistan on their leadership and commitment to empower people by transitioning to electronic payments,” said Ruth Goodwin-Groen, managing director of the Better Than Cash Alliance. “While the benefits of electronic payments are many, this shift requires resources and technical expertise and we look forward to providing this through our partnership with Afghanistan.”


To join the Better Than Cash Alliance a government, company or organization must:

• Make a new commitment to digitize its disbursement of payments.

• Designate senior staff member(s) to create and implement a change management program to reduce physical cash payments.

• Share lessons learned with the Better Than Cash Alliance to inspire and equip others to overcome transition challenges.

As a partner, organizations will be:

• Eligible for technical assistance and/or funding to support the transition, if needed.

• Recognized for leadership in Better Than Cash Alliance publications and media.

• Invited to participate in learning opportunities as appropriate.

• Given access to the latest research and case studies about lessons learned and what’s working for other Better Than Cash Alliance program partners.

The Better Than Cash Alliance works with governments, the development community and the private sector to adopt the use of electronic payments and provides resources to those who commit to make the transition. USAID will use its programs to help transition developing countries from cash payments to electronic payments with an eye toward greater gender equality and financial inclusion.

To learn more about the Better Than Cash Alliance, visit the alliance’s website or follow its Twitter feed.